Bank Account Protection

teapot2000

I understand our money in UK banks is protected up to 85K in general, but how do we protect ourselves against a Bank of England 'Buy In' should they wish to take a percentage of our money in a so called crisis?  The deeper we get strapped into the seat of digital currency and away from cash, the more digital protection we need. 

DullGreyGuy

The FSCS provides the protection for financial institutions going bust which is funded through levies charged to FS companies.

What do you mean by a BoE "buy in"?

Zanderman

DullGreyGuy said:

The FSCS provides the protection for financial institutions going bust which is funded through levies charged to FS companies.

What do you mean by a BoE "buy in"?

OP has, strangely, answered that question in a completely new thread at https://forums.moneysavingexpert.com/discussion/6392253/bank-account-protection, saying:

teapot2000 said:

Because the forum is not letting me edit a previous post or reply to a message, I have reposted again with the correct term I meant to use which is BAIL IN. - instead of buy in. 

I understand our money in UK banks is protected up to 85K in general, but how do we protect ourselves against a Bank of England 'Bail In' should they wish to take a percentage of our money in a so called crisis?  The deeper we get strapped into the seat of digital currency and away from cash, the more digital protection we need.

OP, if things ever got that bad, you can't protect money in banks. But things won't get that bad. And if they did there'd be more to worry about than mere money.

DullGreyGuy

teapot2000 said:

Because the forum is not letting me edit a previous post or reply to a message, I have reposted again with the correct term I meant to use which is BAIL IN. - instead of buy in. 

I understand our money in UK banks is protected up to 85K in general, but how do we protect ourselves against a Bank of England 'Bail In' should they wish to take a percentage of our money in a so called crisis?  The deeper we get strapped into the seat of digital currency and away from cash, the more digital protection we need.

Keep things in one thread!

The whole purpose of a Bail In (https://www.bankofengland.co.uk/paper/2021/executing-bail-in-an-operational-guide-from-the-boe) is that the losses from a failing bank are felt by its investors rather than the public purse or depositors. This is an alternative to the state bail outs we saw in the credit crunch where public funds had to be injected because banks were too big to fail but this meant investors were protected from the fails too. 

Almost certainly if the Bail In failed to stablise the bank you'd see another bail out before a bank would be allowed to fail and even if it did fail then you have the FSCS protection. 

SiliconChip

Take your money out of the bank and invest it all in tin foil!

MEM62

teapot2000 said:

I understand our money in UK banks is protected up to 85K in general, but how do we protect ourselves against a Bank of England 'Buy In' should they wish to take a percentage of our money in a so called crisis?  The deeper we get strapped into the seat of digital currency and away from cash, the more digital protection we need. 

If you referring to a situation where the banks help themselves to cash that is in our accounts that is not going to happen.  

TheBanker

There's a good explanation here:

https://www.bankofengland.co.uk/freedom-of-information/2021/questions-about-bail-in-and-customer-deposits

With respect to depositors whose deposits are not fully protected by the FSCS, bail-in would be applied in accordance with the insolvency creditor hierarchy. This sets out the order in which shareholders, creditors and depositors of a company would receive recoveries should a bank be placed into an insolvency process (also referred to commonly as a ‘liquidation’).

In line with the creditor hierarchy, deposits not protected by the FSCS would only be subject to bail-in if losses are so high that subjecting all of the shareholders and a number of debt-holders to bail-in would not be sufficient 

So the way to protect yourself, as always, is to keep within the FSCS £85k limit.